Who’s Your Gremlin?
Posted by John Draper | Filed under Bad Habits!, Take Control
In my humble (yah!) opinion, The I-Work-Hard-So-I-Deserve-It Gremlin is, perhaps, the hardest to combat. Having slaved away in the mines all day, we feel entitled to a pint with the boys, that new pair of shoes, or dinner out. We need a glass of wine to relax. We need a vacation. We need a new car.
Nothing brings this home faster than when I see people lined up to exchange their money for the latest techno-gadget. I can’t believe that people are so rabid to spend their money that they’ll get in a loooooong line, get rained or snowed on, sleep on the sidewalk just the be able to say they had it first. (Really? First?
Many of the couples I work with demonstrate that they’re walking around with the I-Work-Hard-So-I-Deserve-It Gremlin in tow. They’re willing to exchange their future incomes (yeah, that’s what credit is, people) for STUFF they deserve to have. I’ve had people tell me, “We work really hard, we deserve a vacation.” I’ve had people tell me, “I have a great job, I deserve to drive a nice car.” And I’ve had people tell me, “I do twelve-hour shifts, I deserve dinner out.”
Hey, for all the people who want to drop $700 on the latest cell phone who HAVE THE MONEY IN THE BANK, I don’t have a thing to say to you. It’s your money; spend it any way you wish. But for the dopes who are planning to put that new phone on credit and then carry the balance around for a few years at some ridiculous interest rate (any interest rate), give your head a shake.
The thing about the I-Work-Hard-So-I-Deserve-It Gremlin is that it can trick you into pledging many years of future income for the pleasures you’re seeking today. It doesn’t care how much interest you’re going to have to pay, how much more expensive that Have-to-Have-It item will be when you tack on the interest, or how long it’ll take you to get out of debt. And it doesn’t care that what else may end up losing if your circumstances change and you find you can’t pay for that holiday you deserved.
Advertisers know that people love to take a stroll down Luxury Lane with the I-Work-Hard-So-I-Deserve-It Gremlin. They put it in their clients’ slogans, sing it to you, show you people just like you who are buying what you will come to feel you, too, deserve.
Nowhere has the I-Work-Hard-So-I-Deserve-It Gremlin done more damage than in the arena of home-ownership. We have come to believe we deserve to own our own homes. Never mind that we haven’t had the commitment, the discipline, or the foresight to save a downpayment. Lenders have played into this delusion by offering borrowers far more credit than they should have access to. So there are people who have bought homes they can barely afford. Sadly, when the time comes to renew the mortgage, even a small upward movement in interest rates will make payments unmanageable.
The current foreclosure mess in the U.S. is the fallout of hanging out with the I-Work-Hard-So-I-Deserve-It Gremlin. Re-framed as a “right”, the American dream of homeownership was assumed by too many people who never considered the true costs and sacrifices required to make the dream a reality. And so now the dreams have been shattered and families are finding themselves out in the cold, literally.
I see a lot of people struggling to repay debt for things they felt they deserved. In 2006, almost 100,000 Canadians had to file a creditor proposal or declare bankruptcy because they lost the struggle. In the U.S., 618,000 people filed for bankruptcy. I’m willing to bet dogs to donuts none of those people felt they deserved it.
BTW: No blog tomorrow. We’re taking the kids to Stratford for some Romeo & Juliet and Hamlet. Back Monday. Have a great weekend.
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August 7, 2008 at 9:52 am
Have fun in Stratford, Gail! You-Work-Hard-So-You-Deserve-It!!
August 7, 2008 at 10:51 am
I love reading your blogs every day ever since I’ve discovered your website! I’m addicted — but it’s a good addiction.
Thank you so much for sharing your thoughts and advice!
August 7, 2008 at 11:27 am
I often have this conversation with friends (the ones that still bother to ask even though they won’t like the answer). I get the argument that not only do i need/want it but it’s at a low rate, like 0.9% or something to that tune. sure that’s next to nothing, but still not nothing, and i’d lose the argument saying the interest you’d spend is some kind of huge deal. it is to some, but not most.
but where i win the argument hands down is not necessarily on this purchase but what happens (because you have no savings to buy the first thing outright) when the next emergency comes up, like a roof repair or big car repair? that goes on the line of credit at 8 or so plus % (if you have one) and had you not overextended your self on item A, you’d have the $$$ for the emergency. or at least free up monthly cashflow to pay it off faster. sp 1% in the long run turns into a much higher rate!!!
so it’s all well and good for companies to offer low low interest rates, but what will your rate be on the other items/emergencies that may come up afterwards that you can’t afford?
and if you lose your job and have no extra income to pay in the first place, 0.9% won’t look so good!!!!
August 7, 2008 at 11:31 am
Once again you hit the nail smack on the head.
The “I-Work-Hard-So-I-Deserve-It” gremlin is very loud and persistent, and middle age (or mid-life crisis) seems to amplify it to a deafening volume (“I have worked hard for X amount of years, I SHOULD have these nice things by NOW”).
Then when married with the gremlin you exposed yesterday, it is a diabolic team!
(Have fun tomorrow)
August 7, 2008 at 12:00 pm
Oh ouch, right where it hurts!
I’ve been arguing with hubby over buying a house… I want to buy in six months… he wants to buy in 2 years. We have $30K in debt. My reasoning is that prices will be LOWER THAN EVER in Jan 2009 and they may start to go up. His reasoning is that we should pay off all the debt and save for the downpayment.
He’s probably right.
What always gets me is that we are paying $1450 for rent and we could be paying the same amount for a mortgage. We’ve downsized all we can (while still remaining sane, heck we could move our family of 4 into a cheap studio but we’d be insane in a month) but the rental rates in our city are way up there…
August 7, 2008 at 12:46 pm
I think you hit the nail on the head, people work exceptionally hard and buy because they think they deserve it for their hard work. This is one reason I’m a real fan of a yearly vacation, I honestly think it provides a way to de-stress and reward yourself in a positive way instead of by buying stuff. All of my Canadian friend who work around the clock, some only getting 2 weeks vacay a year, buying stuff, eating out because they are too tired to cook spend hundreds a month on “stuff” they can’t account for and yet won’t spend $800 a year renting a small cottage to get away from it all with their kids/spouse etc. I find keeping my small account and vacation fund, my account with my savings funds and my retirement account has made me see it as “paying myself” instead of paying myself by buying things that add no value to my life!
Enjoy Stratford! It’s grand!!
August 7, 2008 at 2:13 pm
Heather – it’s often said that “rent is a waste of money” but you should remember that it’s not, it’s a useful tool and lets you buy one thing a house can’t – freedom. You can move easily, save easier, and if something breaks, it’s not your problem. Now I own and love my house (and previously owned my loft) in here in Toronto, and trust me, nothing kills your bank account like buying a house. Legal fees, repairs, land transfer taxes, closing costs, lawyer fees can literally add up to $15,000 or more. And that’s for an empty house, before you’ve found out all the stuff you can live with but want to change (I’m looking at you, ugly light fixtures in my living room). ! I just want you to feel better about renting, it sounds like the best option for your family based on your current debt load and it’s not a waste, it’s tool that will let you attack your debt.
I would suggest that your husband is right and unless you have a compelling reason to move, then stay put and save up. In my case, my 800 sq.ft open concept loft was great when I was a bachelor, but when my wife became pregnant it wasn’t going to work so had to move.
As my dad said, owning a house is great, paying for one… not so much.
August 7, 2008 at 3:26 pm
My gremlin: Im-so-in-love-I’ll-buy-it-for-you Gremlin
August 7, 2008 at 5:32 pm
I’ll admit it. I am done with school, I am working 1 to 1.5 jobs, I deserve to eat something other than noodles every day!
If it’s not earned ($$$), it’s not deserved!
I have money set aside for occasional nice things (and holidays), but it is not at the expense of paying back my debts and no interest are charged.
Keeping up with the Jones’ debtload because you expect to have x things by the time your are … years old. Marketing and dreams!
August 7, 2008 at 7:47 pm
I admit it. The Gremlin got me today. I bought a purse on credit because it was lovely and perfect and cheap. I know I’m going to have to take that money out of my spending next pay and re-pay my credit card.
I’m trying REALLY hard to kill the Gremlin, but sometimes it doesn’t work.
I need to put the credit cards away and stay out of the stores period.
Heather, I can understand the desire to buy a home, but I have to agree with Geoff. I am happy to have a home of my own, but I sure don’t like the bills that come along with it, like last year’s betterment fee of over $6700. for a service I’m not even going to use.
My husband & I were fortunate to get a great deal on our home as we bought from a friend of the family, but we would have been a lot smarter had we planned for the extra expenses like a lawnmover, curtains, landscaping, wheelbarrel, paint, new fixtures etc. We went into the house with no debt, but no savings either. Before we knew it we had racked up $10000 in consumer debt, then the betterment fee etc. I’d do it differently if I had the time back.
Frugal Trenches, I think Canada really needs to re-look at vacation time. European countries seem to have this arranged much better. 2 weeks off isn’t much in the grand scheme of things. When I think of my brother travelling across provinces to see us for 2 weeks, that’s not really much relaxation time for him.
August 8, 2008 at 12:00 pm
Have fun today Gail! Enjoy the family time.
August 8, 2008 at 2:18 pm
As also. I love your no nonsense approach. It is so refreshing to see you put your foot down and tell people to grow up. Radio advertising that basically says you can suck the equity out of your house for that fabulous vacation, doesn’t help the situation. Unfortunately there are too many choices for everything in this world and people are getting distracted buying crap instead of spending quality time with their family. Buy crap then work longer hours to pay for it. Wake up people, there is no free lunch. The banking system in the USA in atrocious. Lending money to people with no income, yes no income, is plain stupid. Unfortunately it’s the middle class in the USA who will be bailing out the bone head banks. Meanwhile the idiots running the banks make a killing and then get a huge severance for being incompotent. Put a few of them in jail please. Thanks
August 9, 2008 at 1:09 am
“Act your wage” folks!
August 9, 2008 at 5:13 pm
Haha…thats a really good one….Act Your Wage…:)
August 10, 2008 at 10:46 am
THANK YOU, THANK YOU, THANK YOU!
I will be showing my husband this article today! He is our family breadwinner (with some money from my part) and is sure that he is entitled to anything he wants (and our family as well). I feel like a nag when I have to say, ‘We don’t have money for ____, I just paid all the bills’, or ‘the kid needs ____’
I think as a hardworking family, we are entitled to enjoy the roof over our heads and food in our bellies (even if I had to make it myself at home). We do deserve to have a family outing or for us to have a date but his I-work-so-hard-Gremlin is always on his back, even though he is right, and does deserve it, its just a little misguided.
August 10, 2008 at 11:53 pm
I’m gonna say it again, because it bears repeating: when going on holiday, exchange your home with someone who wants to stay in YOUR town. Hotel bills/ holiday home rentals are for suckers! There are many excellent home exchange websites a quick google search away. Don’t think anyone wants to come to your town? You’re probably wrong. This and many other FAQs are answered on all the sites. You don’t have to go far away or anywhere exotic or involving air fare — ‘a change is as good as a rest’. I live in Victoria and I’m arranging a swap with someone in Gibsons BC. Give it a try! It’s a cheap addiction!
Gail, I don’t know whether you will see this comment, but I’ll ask anyway: why the ‘go to hell’ comment at the top of your blog page? It seems so mean-spirited, which seems the opposite of what you are! I have actually hesitated to direct people to you blog knowing they would be put off by that. Just a thought.
November 12, 2009 at 3:35 am
There has been a vast change in the economy.There has been change in all the sectors in all the parts of the world. In real estate deals foreclosures are increasing.
November 13, 2009 at 2:02 am
Foreclosures are possible in Canada and you could pledge some income for your future through it.